![\"Snowflake](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/05\/108312817-17799146591779914657-46200074002-1080pnbcnews.jpg\")
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Software stocks popped on Thursday after Snowflake<\/a> said it plans to spend $6 billion on compute from Amazon<\/a> and topped earnings<\/a> estimates on artificial intelligence<\/a> momentum.<\/p>\n Shares of the software maker surged 35% and headed for its best day ever. The company is expanding its use of Amazon’s in-house chips for AI.<\/p>\n Along with the announcement, Snowflake topped Wall Street’s fiscal first quarter adjusted earnings per share and revenue expectations.<\/p>\n Finance chief Brian Robins told analysts on Wednesday that AI tools such as Cortex Code are driving a “step function change” in the company’s AI revenue potential.<\/p>\n “AI is only transforming how we operate internally, enabling greater productivity through a combination of slower hiring and more cloud spend,” he said.<\/p>\n Snowflake also boosted guidance on growing momentum toward its AI-powered tools, including Snowflake Intelligence and Cortex Code.<\/p>\n Snowflake expects a 12.5% fiscal second-quarter adjusted operating margin on $1.415 billion to $1.420 billion in product revenue. Analysts surveyed by StreetAccount anticipated a 11.9% margin, with $1.37 billion in product revenue.<\/p>\n Snowflake’s results helped alleviate fears<\/a> that new AI tools will replace<\/a> software as a service, leading to what many are calling a “SaaSpocalypse.” The worries sparked a massive selloff across the sector this year, which also spilled into cybersecurity<\/a>.<\/p>\n The results boosted some popular software stocks. ServiceNow<\/a> climbed 5%, while Oracle<\/a> and Palantir<\/a> jumped more than 3%. Salesforce bucked the trend, with shares largely flat after posting lackluster guidance<\/a>.<\/p>\n Analysts on Wall Street viewed Snowflake’s results as a sign that its AI monetization strategy is reaching an inflection point.<\/p>\n The company said it added 616 net new\u00a0customers in the quarter, reflecting 38% year-over-year growth. Snowflake said it now has 779 customers spending more than $1 million on a trailing 12-month basis. The company had 46 cross the $1 million benchmark in Q1, compared to 26 a year ago.<\/p>\n Building on its AI strategy, Snowflake said it will buy AI startup\u00a0Natoma<\/a>. The company did not disclose the financials of the deal.<\/p>\n “Through the course of an economic cycle and longer term, the combination of Snowflake’s healthy growth profile and cash flow dynamic should show the merits of Snowflake’s business model, in our view,” wrote analysts at JPMorgan.<\/p>\n With Thursday’s gains, Snowflake shares are now up about 6% this year.<\/p>\n Stock Chart IconStock chart icon Snowflake year-to-date stock chart.<\/p>\n![\"hide](\"https:\/\/static-redesign.cnbcfm.com\/dist\/a54b41835a8b60db28c2.svg\")
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